Multiple news originations reported yesterday that Russian troops were shelling Europe’s largest nuclear power plant in Ukraine, causing a fire. In the midst of an already volatile nuclear threat from Putin and skyrocketing oil prices, this news brings even more complications to the energy market.
While no radiation was released and the fire at the Zaporizhzhia nuclear power plant has since been extinguished, nuclear energy stocks still plummeted this morning. North Shore Global Uranium Mining ETF dipped 8.4% between the market close on Thursday and the open on Friday. Global X Uranium ETF dipped 7.4% during that same time.
Nuclear energy is among the most efficient and easily scalable low-carbon sources of electricity. This has led some environmentalists to embrace nuclear as a clean energy source. And unlike renewables, nuclear can be produced in a relatively small space and can be easily scaled during times of high energy demand.
But experts have always worried about the potential for hazardous nuclear waste and dangerous accidents. Most recently, the nuclear meltdowns at the Japanese Fukashima power plant led to the shutting down of all but two nuclear power plants in Japan. The plants were replaced with carbon-heavy fossil fuels like natural gas and coal.
Many worry that a similar process could now happen in Europe, and fear of nuclear accidents will bring about an increasing reliance on fossil fuels. Ironically, the deadliest nuclear disaster ever occurred in Chernobyl, Ukraine, and helped fuel the modern day anti-nuclear movement.
While one would expect fossil fuels and renewables to see a stock price jump after this incident, that has not been the case so far. Shell stock actually dipped 2.3% between open and close on Friday.
Because the nuclear fire did not lead to any radiation leaks, it is less likely that this incident will affect the overall energy markets permanently. However, if the Russian military were to shell another nuclear plant in Ukraine, things could easily get out of hand again.